IHTM31720 | Assessing: other repayment issues: provisional repayments
From HM Revenue & Customs · Inheritance Tax Manual
Whenever
it appears that tax has been overpaid, but
the case is not ready for final calculation
you should always consider making a provisional repayment, even if the taxpayer or agent has not specifically asked for one.
When considering whether we should make a provisional repayment, you should weigh up:
the fact that it is undesirable for us to keep money on deposit that is substantially more than the expected liability, with.
the need to make sure that the interests of HMRC are not prejudiced.
The taxpayer or agent will usually ask for, or should be offered an interim repayment, where:
We have agreed an amendment, deduction or allowance, which by itself would lead to a repayment. But, other matters that may affect the tax amount of payable are still open.
We have agreed in principle that an amendment that would result in a substantial repayment is due, but the exact amount has not yet been quantified; and the taxpayer or agent has asked for a repayment.
The taxpayer or agent has overpaid tax on delivery of the IHT400, because:
they made a mistake about the facts
they did not deduct a relief or exemption that was due
they made a substantial arithmetical error.
If you think that a provisional repayment should be made you should speak to your manager.
Provisional repayment not appropriate
You should not normally issue a provisional repayment where the amendment has not been
established in principle. or
quantified in amount.
Again, consult your manager if the taxpayer or agent asks for a provisional repayment, but you do not consider it is appropriate.